Californians spent $250 mln on excessive health premiums, group says

SACRAMENTO, Calif. (Reuters) - Californians paid a quarter
of a billion dollars in health insurance premiums during a
15-month period ended last year that were deemed excessive by
state regulators, a consumer group said Wednesday.

Santa Monica-based Consumer Watchdog, which released the
figures on Wednesday, is pushing Proposition 45, a ballot
initiative that would give regulators the power to reject rate
increases determined to be excessive.

"Patients are powerless against these rate increases," said
Paul Song, a physician and activist based in Los Angeles who is
working to support the ballot initiative. "This system has been
deleterious to our patients."

Using data from the California Department of Insurance and
the California Department of Managed Healthcare, the
organization said that from April 1, 2012 though November 1,
2013, regulators found $250 million worth of planned insurance
increases for people who buy their own individual insurance
policies to be unreasonable, the group said.

Their ballot measure, which is supported by California
Insurance Commissioner Dave Jones, would give regulators the
power to approve or deny proposed rate increases.

"Over 1 million Californians were forced to pay excessive
rates because our determination is not binding," Jones said at a
legislative hearing on the proposed ballot initiative in
Sacramento on Wednesday. Had he been granted the power to deny
insurance companies rate increases deemed excessive, the $250
million in unwarranted premium increases would not have been
allowed, Jones said.

The initiative, which has already been approved for the
November 2014 ballot, has drawn opposition from a insurance
companies, which say it will limit their ability to manage the
costs of providing care. The California Medical Association,
which represents doctors, has said it could lead insurers to
reduce the rates paid to physicians by limiting the ability of
insurance companies to set rates as needed.

Peter Lee, head of California's insurance exchange set up
under the Affordable Care Act, or Obamacare, said he worried
that giving the state insurance commissioner veto power over
rates could cause insurers to leave the state.

Such power could also undermine the exchange's role in
negotiating rates for its own customers with the insurance
plans, Lee said.

But Jones, the state insurance commissioner, said those
concerns were unwarranted.